Politics in Albania in 2003 focused largely on local elections that took place on October 12. The governing Socialist Party claimed victory in 36 of the country’s 65 largest towns, including the capital, Tirana. Final results could not be published, since the opposition refused to sign the ballot protocols, charging the Socialists with “fixing the results.” After the ballot, the Organization for Security and Cooperation in Europe mission chief Robert Barry noted “progress toward compliance with OSCE, Council of Europe, and other international standards,” however. In the run-up to the voting, Prime Minister Fatos Nano strengthened the influence of his conservative wing of the Socialist Party through a government reshuffle on July 23 following the resignation of his rival, the foreign minister and former prime minister Ilir Meta, from office. On July 28, however, the Assembly rejected Nano’s nomination of Marko Bello to succeed Meta, showing that support for Meta, who belonged to the reform wing of the party, was still strong among the majority of the Socialist legislators.

On February 13 in Tirana, the integration minister, Sokol Nako, and European Union representatives held the first round of talks on the Stabilization and Association Agreement. In March, in its second annual report on the stabilization and association process, the European Commission warned Albania to speed up legal and administrative reforms, fight corruption and organized crime, and start the restitution of or compensation for land expropriated during the communist regime. On August 7 Nano announced the return of property to the family of Leka Zogu, the son of the late King Zog. At the same time, the Assembly began debating a law on restitution sponsored by the Organization for Security and Co-operation in Europe.

Albania sent a contingent of 70 soldiers in April to join the U.S.-led coalition in the Iraq war. The foreign ministers of Albania, Croatia, and Macedonia signed the U.S.-Adriatic Charter with the U.S. secretary of state in Tirana on May 2 to promote mutual cooperation.

Albania’s relations with neighbouring countries and regions generally improved in 2003. Following an outbreak of ethnic Albanian separatist violence in northern Macedonia in late August, Albanian Pres. Alfred Moisiu expressed his full support of the Macedonian authorities’ fight against “extremist groups.” On September 12 the defense ministers of Albania, Croatia, and Macedonia signed a declaration stressing the need for a joint fight against organized crime and terrorism. In mid-July the presidents of Albania, Bulgaria, and Macedonia held a series of meetings on infrastructure cooperation, focusing on the east-west transport Corridor VIII and a joint pipeline project. Albania also opened new border crossings with Macedonia and Montenegro. A free-trade agreement between Albania and Kosovo was signed in Pristina, the capital of the Serbian province, on July 7.

Relations with the newly renamed Serbia and Montenegro deteriorated, however, after the Serbian parliament approved a declaration on August 27 reaffirming its claim to Kosovo and a draft constitution for Serbia and Montenegro referred to Kosovo as a part of Serbia. The Albanian parliament declared that this resembled “a dangerous return…to nationalist policies.”

Unemployment was on the decline in Albania and was about 15% in 2003. GDP growth remained about 5% in 2003, while the budget deficit decreased to about 6% of GDP.